MMBA 558 International Business
Assignment 4: Managing Pibrex (A): New Crisis, Old Grievances
Student Name: Deane Nicholls
Student ID: 300 181 563
Course Coordinator: Val Lindsay
Due Date: Monday 11th April
Pibrex is one of the world’s largest developers of petrochemical polymers for the plastics market. The company has purchased a plant in Russia and after three years of serious operating losses it has appointed a new general manager of the plant. Then plant lacks a strong organisational culture; communications within and between departments are poor; there is inequity between in wages, working conditions and training and problems with motivation and …show more content…
Identification of Key Issues and Challenges.
Pibrex Russia is faced with a multitude of problems and challenges that it needs to deal with as it progresses through 1988 and 1999, if it is to break even by the year 2000. ?The following is a synopsis of the most critical issues
(a) The Financial Situation in Russia
Pibrex Russia faces very challenging external factors that make for a very difficult external environment as a result of the Russian financial crisis
The unstable financial situation bought about by the RFC means that Pibrex Russia is strugging to increase its revenues and reduce its costs due to rampant inflation; a dramatically devalued Russian currency, the ruble; the evodus of foreign investment funds; the financial collapse of many Russian small to medium enterprises, multiple bank faces and an increasing unskilled, unmotivated and cynical workforce. This unstable financial situation means that Pibrex’s costs (particularly of raw materials) is going up and increasing company failures will mean it will be more difficult to make sales. It will have difficulty finding plant finance and to attract and retain employees with the right skills.
(b) Difficulties in the Internal Operating / Accounting Environment.
The internal operating environment of the company also seemed very chaotic, like the external environment. There was a lack of internal accounting controls, which I assume would eventually impede the dire to